Welspun Enterprises Limited has informed stock exchanges about an income tax demand notice received by its subsidiary company, marking a significant regulatory development that requires investor attention.

Tax Demand Details

Welspun Aunta-Simaria Project Private Limited, a subsidiary of Welspun Enterprises, received a Notice of Demand under Section 156 of the Income Tax Act, 1961. The notice was issued pursuant to an Assessment Order passed by the Assessment Unit, National Faceless Assessment Centre of the Income-tax Department.

Nature of Dispute

The tax litigation centers around a dispute raised by the Assessing Officer regarding the computation of income under ICDS III read with Section 43CB of the Income Tax Act, 1961. The specific contention involves the application of the percentage completion method for accounting purposes.

The company has maintained that it followed an accounting approach appropriate to Hybrid Annuity Model (HAM) projects, consistent with industry practices adopted by infrastructure companies engaged in similar project development. The management believes the accounting treatment adopted is appropriate and complies with the applicable framework for such projects.

Company's Response Strategy

Based on the company's assessment, the demand is considered non-maintainable. Welspun Enterprises is taking appropriate steps to file an appeal before the Commissioner of Income-tax (Appeals) Tribunal against the Order issued by the Assessing Officer.

The company has stated that it does not foresee any material impact on its financial, operational, or other activities due to this tax demand. This assessment reflects the management's confidence in their accounting practices and the strength of their position for the upcoming appeal process.

Regulatory Compliance

The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company provided comprehensive details as required under Part A of Schedule III, ensuring full transparency with stakeholders regarding this regulatory development.

This development highlights the ongoing scrutiny faced by infrastructure companies regarding their accounting methods for complex project structures, particularly in the context of HAM projects that involve specific revenue recognition principles.

Welspun Enterprises has received a disclosure from Dilipkumar Lakhi and his group regarding significant changes in their shareholding pattern. The disclosure, made under Regulation 29 of SEBI Takeover Regulations, reveals a net reduction in the group's stake in the company.

Shareholding Details

The disclosure shows the group's shareholding position before and after the transactions:

Transaction Overview

The filing reveals two separate sets of transactions conducted by the group:

First Transaction Set:

• Shares involved: 3701165
• Percentage: 2.6740%
• Nature: Sale transactions

Second Transaction Set:

• Shares involved: 1234532
• Percentage: 0.8919%
• Nature: Purchase transactions

Group Members

The disclosure identifies nine persons acting in concert with Dilipkumar V. Lakhi:

• Chirag Dilipkumar Lakhi
• Karuna Dilipkumar Lakhi
• Girdharilal V. Lakhi
• Manish Lakhi
• Ritesh Girdharilal Lakhi
• Vandana Girdharilal Lakhi
• Namrata Manish Lakhi
• Krsna Suraj Kalra

Transaction Details

Company Share Capital

The disclosure also provides information about Welspun Enterprises' share capital structure:

The group confirmed that they do not belong to the promoter or promoter group category. The disclosure indicates no encumbrances, voting rights other than shares, or convertible securities held by the group. All transactions were conducted through open market operations on BSE and NSE exchanges, with the group maintaining transparency in their shareholding activities as required under SEBI regulations.